As I understand it playing through PMS does not support selectable subtitles. What is the best way to solve this, are there tools to convert these movie to play them another way? Or to make the subtitles external, so they can be added while playing?

Doesn't seem to work for AVCHD with selectable subs. Read somewhere AVCHD structure is quite complex. PMS3 appears to play "just"the m2ts file, not the AVCHD disc (with all its folders and extra stuff).

Sorry forgort you are talking about AVCHD. Not possible, PS3 doesn't support menu, embedded subtitles, DTS when streaming. Only when you burn it on media.Also PMS at the moment doesnt support AVCHD/Blu-Ray structure,images...You can only navigate to .m2ts files directly...